DEAL OF THE YEAR OVER $50M

WHY FORI AUTOMATION INC. IS THE ACG DEAL OF THE YEAR OVER $50M

When Bernd Koerner — the longtime majority owner and former CEO of Fori Automation Inc. in Shelby Township — decided to sell the company, he directed the management team to find a strategic partner in the Midwest that shared the same values and synergies.

“Bernd was emphatic that the buyer come from the Midwest, and that they have the same vision and growth strategy that we have,” says Paul Meloche, who took over as CEO of Fori Automation in January from Mike Beck. “We also wanted a buyer that was well-capitalized to make future investments in the electrified space.”

Approximately a year after an initial letter of intent was signed by Lincoln Electric Holdings Inc. in Cleveland, the $427-million acquisition of Fori Automation closed in December. Lincoln Electric is a global leader in the engineering, design, and manufacturing of advanced arc welding solutions, automated joining, assembly and cutting systems, and plasma and oxyfuel cutting equipment, and has a leading global position in brazing and soldering alloys.

While the due diligence period was fairly straightforward, Meloche says there were some challenges. “Lincoln is a large global publicly traded company that has a large due diligence team with a deep bench, and we had three to four people in our inner circle who were managing the business full time while overseeing the transaction,” he says.

To help close the deal, Fori Automation worked with UHY Corporate Finance, which served as the investment banker, with legal services provided by Butzel Long in Detroit. On the Lincoln side, KPMG handled the financial diligence, while Cleveland-based BakerHostetler oversaw legal matters.

“The deal was a strategic play by Lincoln to become a major player in the electrified space by acquiring a capability that would take them years to develop internally,” says W. Patrick Dreisig, a shareholder at Butzel. “Fori represents the best of what creative, innovative entrepreneurs can accomplish where large, well-capitalized publicly traded companies sometimes fall short.

“Lincoln filled the bill on this, and made it possible for our client to feel good about the sale and the future job security of all of its employees. Although certainly not an Apple or Google type deal, this deal nevertheless represents a major high-tech deal in our local economy.”

Since the closing, Meloche says Fori Automation has seen increased orders and added skilled personnel. In turn, the deal allowed the company to expand outside its automotive client base, where it’s a leading designer and manufacturer of complex, multiarmed automated welding systems with an extensive range of automated assembly systems; automated material handling solutions; automated large-scale, industrial guidance vehicles; and endof-line testing systems.

“Lincoln allows Fori to expand into other industries and cross-sell into their customer base,” Meloche says. “It’s a win-win all the way around.”